BSkyB’s Ultra-HD conversion could cost £3.2bn

BSkyB could be facing a bill of £3.2 billion in capital expenditure for a conversion to Ultra-HD, says a report from Berenberg Bank. The bank says that while the new High Efficiency Video Codec (HEVC) would create bandwidth savings for the broadcaster of around £50 million annually in operating costs, the final bill for Ultra-HD would be much greater.

“While a certain level of incremental efficiency can be achieved via the use of new codecs, no step-change in compression – i.e., the switch from MPEG-2 to MPEG-4, or from MPEG-4 to HEVC – is possible without new chip-sets. IN other words,” says the bank, “pay-TV operators looking to achieve major efficiencies in satellite capacity must make huge capital investments in new set-top boxes.”

The report also raises another potential problem for broadcasters adopting Ultra-HD. “While pay-TV operators may look to switch off MPEG-2 in order to permit more HD channels and ultimately the launch of Ultra HD, it is unclear what would happen to households watching free-to-air in MPEG-2. With no-one to fund those set-top boxes, consumers would need an incentive to buy a new box themselves. Such an incentive could be more HD channels, we think. This would neutralise the switch-off of MPEG-2.”